Within the last month, more and more brokers offer Chinese Yuan as instrument for forex trading, both in spot and option. The currency is not floated as it is with advanced countries currencies and has been under controlled trading by People's Bank of China (PBOC) for a long time. It has just recently emerged as a new favorite in forex industry.

Within the last month, more and more brokers offer Chinese Yuan as instrument for forex trading, both in spot and option. The currency is not floated as it is with advanced countries currencies and has been under controlled trading by People's Bank of China (PBOC) for a long time. It has just recently emerged as a new favorite in forex industry.

On April 9, US-based broker FXCM announced that USD/CNH pair will be available to be traded in all platforms except in Japan. Two days before that, Saxobank launched USD/CNH OTC options, expanding its CNH offering that's already included XAU/CNH and other pairs besides. On March, at least two brokers, IC Markets and Armada Markets, has mentioned their intention to reach Asian hearts by offering USD/CNH pair. FxOpen even offered BTC/CNH and LTC/CNH pairs in its crypto account.

buy

The popularity of CNH, or offshore Yuan, in online forex trading, is mainly due to three reasons:

 

1. China Has Became an Economic Giant

It is undeniable that China economy influences other economies, even in advanced countries. Australia, for one, is said to rose to prominence due to its trade with China. China hold strong business interests in Asia and beyond, and this makes Chinese Yuan a very attractive piece in forex trading.

 

2. Higher Chinese Yuan Flexibility

On March 15, Chinese central bank PBOC famously doubled Yuan daily trading range from 1% to 2% up/down of parity rate in an effort to increase the currency flexibility. On one hand, it provides a challenge for Chinese companies in accomodating Yuan fluctuative movements. On the other hand, it makes Yuan more enticing for forex trading, and is a step toward a globally accepted and more freely traded currency.

 

3. Online Forex Brokers Expansion to the East

As forex brokers are expanding their markets to the east, it became a must to attract Asians to deal with them. First step is surely website and customer support language, then maybe easier deposit and withdrawal facility or regional office if it is possible. But what will be a distinct offering is particular regional trading instrument such as Chinese Yuan.

Based on the three reasons, we could expect more brokers to offer Yuan pairs this year and the next. Yuan popularity will continue to go strong as long as PBOC maintain its commitment to internationalize Chinese Yuan. So, if you are a forex trader, it might be advantageous in the long term to try out spot trading CNH and other Chinese Yuan variations now. Who knows, you could get a head start in arranging special trading system or EA to trade the currency.